Jordanian Dinar Definition

The currency abbreviation or currency symbol for the Jordanian Dinar (JOD), the currency for Jordan. The dinar has smaller denominations or subunits. In other words, one dinar is equal to 10 dirhams, 100 qirsh and 1,000 fils. The dinar is also circulated on Israel's West Bank.

The dinar was first seen replacing the Palestinian pound in 1949. Dinarian coins were denominated in Arabic until 1992 and then changed to English. The dinar has been pegged to the U.S. dollar for the past twenty years.

The country of Jordan pegged their local currency to the U.S. dollar to create stability in their financial system. Typically, if a country's currency exchange rate fluctuates wildly, it's difficult to attract foreign investment, and capital flows might leave the country in search for more stable investments.

By pegging the dinar to the dollar, Jordan gets the benefit of a stable currency regime, meaning their local banks are likely to attract deposits. A stable currency also leads to increases in foreign direct investment into Jordan.

The JOD is pegged to the U.S. dollar at an exchange rate of .7090 for every dollar. For example, let's say you were sending a wire transfer to Jordan and wanted to convert $1,000 to dinars. The exchange would result in 790 Jordanian dinars.